ASX Today, page-37135

I'm afraid I cannot agree with your LTR "profit" number. You have not defined what your "profit" is but we will not get into that maze at the moment.
My numbers:
ASSUMPTIONS:
1. Production 613 ktpa SC6.0
2. SC6 price = US$850/dmt CIF (I&F = US$20/wmt)
3. At full production and after commissioning. C1 = A$651/dmt FOB. AISC = A$916/dmt FOB
4. Corporate Overheads = A$25m pa
5. Depreciation = A$41m pa
6. Debt = A$300m. Repayment period = 5 years. Interest = 7%
7. Tax Rate = 30% (There are some tax losses available which will improve FCF slightly in Y1)
RESULTS:
1. EBITDA = A$255m
2. Profit After Tax (PAT) = A$137m
3. FCF (PAT + Depreciation - Sustaining Capital) = A$73m
NOTES:
1. The Results DO NOT include the higher C1 costs in Y1 which inevitably arise from the commissioning process. They will depress EBITDA, PAT and FCF in Y1.
2. FCF does include the Capital Costs of exploration, stripping, development capital, dividends and debt repayments. Once included the Net Cash Flow (NCF) is around BREAKEVEN but more than likely NEGATIVE.
3. If any major problems occur during the commissioning process then we can expect a significant negative impact on NCF.
FINALLY:
1. At the current SC6 price LTR's whole operation sits on a knife edge. If they decide to ramp up to full production then they will be assuming that they have sufficient cash to fund the operation until the SC6 price improves sufficiently to generate positive NCF. If the SC6 price does not improve then the petty cash box will run dry.
2. So the LTR BOD are in the position of having to make a rather important strategic decision.
3. If their SC6 price assessment is negative then acquisition by a cash rich company with deep SC6 expertise such as PLS would be one way of preserving the future value of LTR for all its shareholders.

Just early morning ramblings and very much IMO ony.